Democratic Presidential Hopefuls Offering Early Foreclosure Solutions
With a recent Business Wire press release indicating that there were 131,574 households in the United States in some stage of foreclosure in July (or one mortgage foreclosure per every 879 households), Democratic presidential hopefuls have begun to address the foreclosure crisis.
Democrats Hillary Clinton of New York, John Edwards of North Carolina, Barack Obama of Illinois and Chris Dodd of Connecticut have all offered their own solutions to stop foreclosure. Campaign watchers have indicated that the mortgage foreclosure topic will be an interesting view in upcoming debates as it will allow these Democrats to convey an idea to the nation that the Republican policies of George W. Bush have especially hurt middle- and lower-income families.
So what exactly are these candidates proposing to stop foreclosure in the United States?
Clinton has said that she would create a $1 billion fund to help those families who need to stop foreclosure. She has also pledged to ban fees that penalize people for making early repayments and would require lenders to give people a better feel of if they could afford their mortgage by providing taxes and insurance in their calculations of monthly mortgage payments.
Clinton has further indicated that she would require lenders to disclose the fact that they make more money from larger mortgages, thus indicating that their advice may not be aligned with the best interests of borrowers. Clinton has suggested that she would like to bolster state licensing standards for mortgage brokers and also publish an online registry detailing a history of complaints against brokers.
Clinton has said that she will introduce her foreclosure legislation after Labor Day. It will be interesting to see if her proposed foreclosure laws are as ambitious as her indications above.
As for Edwards, he has gone after Clinton, saying that she is too late in the foreclosure game. Projecting himself as being the most aggressive candidate on the foreclosure crisis, Edwards has said that he would support a national law that would get rid of abusive lending practices. For example, this national foreclosure law would prohibit balloon loans in which interest rates go up in time and produce mortgages that homeowners can no longer afford.
Edwards also wants to rewrite bankruptcy laws and establish a fund for homeowners who have "underwater" mortgages that are higher than the value of the home.
Like Edwards, Dodd has called out shady lending and noted that he's cosponsored several bills since the beginning of the decade to protect prospective homeowners from predatory lending practices.
As for the Obama camp, the rising Senator has offered legislation that would support counseling for people who need to stop foreclosure and also impose new penalties for mortgage fraud.
And what about the current administration in the White House? A Boston Herald story detailed how the Bush administration has pitted the blame for the foreclosure crisis on the subprime lending market while also saying that the current foreclosure problems are not affecting the economy.
While you may take what you like from the last part of that statement, one thing is certain as Democrat and Republican presidential hopefuls make their bids for the White House in 2008: the foreclosure epidemic will continue to become an important issue of debate.
Here's hoping that political promises will result in actual action to help families stop foreclosure!